Agony Lance: Should you buy Bitcoins?

Agony Lance: Should you buy Bitcoins?

Should I buy some Bitcoins– Moneybags, Twizel

That’s for you to decide, and they have certainly experienced a lovely increase in value recently – over $400. While it’s not a place for the less technically savvy who can’t figure things out, it’s also not a place for putting all of your money.

There’s clearly high potential for Bitcoins to either soar insanely in value or plummet towards zero.

There is also potential for it to be very difficult to convert the Bitcoins into real currency in the future, with the US banking system going after each Bitcoin exchange that they can.

There are also interesting tax considerations, as under New Zealand’s investment rules all non-New Zealand and Australian debt and equity investments are taxed at five percent of the opening value each year. So if your Bitcoins become worth $100 million after a sharp ramp-up, you could be taxed on $5 million in the following year. 

That’s what they call a high-quality problem and I’d be seeking both liquidity to pay the bills and professional advice.

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